Bitcoin has just remained above $86,000 this Tuesday, after many weeks of strong growth supported by the return of appetite for risk. Various observers see in this scenario the end of “crypto winter”however the liquidation of short positions and monetary uncertainties always call for caution.
In brief
- Bitcoin remains above $86,000, after several sessions of strong growth.
- Four signals support the recovery: technical momentum, return of ETFs, rise in the crypto market and renewed appetite for risk.
- Liquidations of short positions accelerated the rise, reinforcing the short-term movement.
- Altcoins also benefit from a more favorable regulatory climate, despite the failure of the CLARITY Act in the Senate.
- US monetary policy remains the main risk, with rising rates and uncertainties around inflation.
Four signals support bitcoin recovery
Bitcoin gained more than 5% last Friday, then almost 6% this Monday, before managing to maintain a majority of its gains. Its price crossed 86,000 dollars, a level it had not reached since the end of January.
Sean Farrell, head of digital assets at Fundstrat, believes the breakout is strong enough to indicate a cycle change. He declared :
I think the crypto winter is over, although the rise won’t necessarily be linear.
Many elements currently consolidate this bullish reading:
- Bitcoin has surpassed its 50-day moving average, an indicator followed to measure the intermediate trend;
- The price reached $86,000 after trading below $80,000 for much of the year;
- Demand for spot Bitcoin ETFs has recovered after several periods of outflows;
- The total capitalization of the crypto market reached $2,940 billion on Monday.
However, the latter figure remains almost 30% below the October 2025 record. In addition, bitcoin continues to trade far from its all-time high at more than $125,000. The rebound therefore erases part of the bear market, without returning valuations to their previous records.
ETFs and liquidations fuel the rise
According to Nansen analyst Nicolai Sondergaard, the rally is essentially a combination of returning demand for ETFs and a major short squeeze. Such a mechanism occurs when traders who have bet on a correction must quickly buy back bitcoin in order to close their positions.
These forced buybacks contribute to the creation of additional demand. They can suddenly accelerate this increase. Thus, the crossing of several resistance levels triggered a cascade of liquidations within short positions. This phenomenon justifies part of the speed of this movement, however it does not guarantee that progress will be able to continue at the same pace.
However, there is broad support for this increase. Altcoins also moved after the Securities and Exchange Commission’s decision to offer a five-year exemption to certain tokenized stock trading activities. Such a measure consolidated optimization around blockchain infrastructures, mainly Ethereum and Solana.
The market even resisted the failure of the CLARITY Act in the Senate. Indeed, this bill should provide a federal framework for cryptos. Its blocking could have triggered a decline, but investors still seem to be banking on clearer standards directly established by regulatory agencies.
Monetary policy remains the main risk
In August, bitcoin had already exploded by almost 25%. This increase followed multiple interventions by the US Treasury on the bond market and in favor of the yen. Wall Street had interpreted such operations as an attempt to limit the rise in yields, favorable to risky assets.
The recent correction in oil prices has also improved the market climate. Cheaper oil reduces inflationary fears and slows the rise in bond yields. Thus, bitcoin benefited from the same return of risk appetite as technology stocks.
However, the Federal Reserve has just raised its rates, and the markets had estimated the probability of a further increase before the end of this year at 56%. A resurgence in inflation or a rise in yields would therefore weigh on crypto demand.
Crossing the 50-day moving average confirms a technical improvement, however it does not eliminate macroeconomic risk. For lasting validation of the end of the crypto winter, bitcoin will need to maintain the $80,000 threshold, attract regular flows to ETFs and evolve without depending exclusively on seller liquidations.
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